Issue link: http://www.e-digitaleditions.com/i/55470
Williamson Ostrom work has been used in the real world to bring about change or a deeper understand- ing of how organizations work? In 1966–67, when I was serving as Special Economic Assistant to the Head of the Antitrust Division of the U.S. Department of Justice, the Antitrust Division and the Solicitor General's Office were preparing a brief for the case of United States vs. Arnold, Schwinn & Co. Schwinn, the bicycle manufacturer, was accused of price fixing and other antitrust behaviors. When asked to comment on the brief, I decided it was seri- ously defective. It relied exclusively on neoclassical and standard indus- trial organization reasoning, neglect- ing considerations of organizational and contractual efficiency. However, my arguments were regarded as alien and set aside, and the case was, in my opinion, incorrectly decided. Ten years later, types of contractual reasoning that previously were con- sidered alien were introduced into a similar Supreme Court case—and this time led to a better result. Another example is the introduc- tion of transaction cost reasoning into the regulation of natural monop- olies, which has had lasting results. Transaction cost reasoning also can be applied to corporate governance and to the use of debt and equity. More generally, any issue that can be viewed as a contracting problem can be examined in terms of trans- action cost economizing. "Career marriages" is an entertaining example. You've described your work as a blend of social science and abstract economic theory, and it's certainly multidisciplinary. How can schools make sure students understand how to cross disciplines to expand their ideas and their knowledge? It is one thing to talk about the mer- its of interdisciplinary training. It is another to do interdisciplinary work. A useful way to investigate any puz- zling issue is to start from a mono- disciplinary perspective. If you reach a good understanding with the use of a single discipline, all well and good. If, however, you conclude that some of the core issues are being scanted, then you should consider viewing the problem through a lens that com- bines disciplines. For students about to graduate with degrees in economics, what areas of the field do you think they would find most interesting or significant today? There are many good fields in economics. Some are flourishing, and it is satisfying to get on those bandwagons. Some are faltering, but present an opportunity to revitalize a field by bringing a new and poten- tially more productive approach to bear. The applications of transaction cost economics are by no means played out! For what do you most want to be remembered? I would like to be remembered for the fact that, when confronted with a puzzle or anomaly, I didn't appeal to orthodox economic theory by pronouncing, "This is the law here." Instead, I asked, "What is going on here?" and I appealed to both economics and organization theory to help fashion an answer. Aspen Recognizes Schools, Professors The Aspen Institute's Center for Business Education has released the results of its 2009–2010 Beyond Grey Pin- stripes survey, which ranks business schools by how well they integrate social and environmental issues into their MBA programs. The top ten schools in this edition of the biennial survey are the business programs at York University in Toronto, Ontario; the University of Michigan in Ann Arbor; Yale Uni- versity in New Haven, Connecticut; Stanford University in Palo Alto, California; Notre Dame in South Bend, Indiana; the University of California in Berkeley; Erasmus University in Rotterdam, the Neth- erlands; New York University; Insti- tuto de Empresa in Madrid, Spain; and Columbia Business School in New York City. Programs were assessed in four areas: availability of relevant courses, student exposure to these courses, relevant courses on for- profit impact, and faculty research. A complete listing of ranked schools can be found online at www.beyondgreypinstripes.org/. BizEd JANUARY/FEBRUARY 2010 9 WILLIAMSON: UC BERKELEY/GETTY IMAGES; OSTROM: INDIANA UNIVERSITY/GETTY IMAGES